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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported): March 7, 1994
CoreStates Financial Corp
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(Exact name of registrant specified in its Charter)
Pennsylvania 0-6879 23-1899716
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(State or other (Commission (IRS Employee
jurisdiction of File Number) identification No.)
incorporation)
Centre Square West, 1500 Market Street
Philadelphia, Pennsylvania 19101
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(Address of principal executive offices) (Zip Code)
Registrant's telephone, including area code: (215) 973-3806
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(Former name and former address, if changed since last report)
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Item 5. Other Events.
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The information set forth in the news release of CoreStates Financial
Corp dated March 7, 1994 announcing the acquisition of Germantown Savings Bank
by CoreStates Financial Corp as Exhibit 99 is incorporated by reference and made
a part hereof.
Item 7. Exhibits
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99 CoreStates Financial Corp News Release dated March 7, 1994
CORESTATES FINANCIAL CORP
(Registrant)
By /s/David T. Walker
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David T. Walker
Deputy Chief Counsel
Dated: March 8, 1994
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Exhibit Index
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Exhibit No. Page
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99 CoreStates Financial
Corp News Release
dated March 7, 1994 4
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[LETTERHEAD OF CORESTATES Exhibit 99
FINANCIAL CORP. APPEARS HERE] ----------
Contact CoreStates: Gary Brooten (215) 973-3546
Germantown: Janet C. Parkinson (215) 660-8409
For Release Immediately Upon Receipt
CoreStates, Germantown Savings Bank
Enter Into Acquisition Agreement
Philadelphia, PA, March 7, 1994 -- CoreStates Financial Corp and Germantown
Savings Bank (GSB) announced today that they have entered into an agreement for
CoreStates to acquire GSB for a combination of cash and stock.
Germantown Savings Bank (NASDAQ--GSBK) is a $1.6 billion-assets, 140-year-
old institution serving five southeastern Pennsylvania counties through 32
community banking offices.
CoreStates (NYSE--CFL) is the Philadelphia-based, $23.7 billion-assets bank
holding company whose lead bank, CoreStates Bank, N.A., is the market leader for
most segments of commercial banking in the five-county Philadelphia metropolitan
area.
Under terms of the agreement, approved by directors of both companies, each
of GSB's 4.19 million shares will be exchanged for cash, CoreStates shares or a
combination of cash and shares valued at $62.00. The total transaction value
approximates $260 million.
CoreStates also has received an option to purchase up to $19.9% of GSB's
stock if certain contingencies occur.
Assuming approval by regulators and by GSB shareholders, the transaction is
expected to close in the third quarter of 1994, and will be accounted for as a
purchase.
CoreStates Chairman Terrence A. Larsen said that GSB is "a
great Philadelphia institution with superb performance and with the
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same emphasis on close customer and community relationships that we value at
CoreStates. We expect customers to see significant added benefits as a result
of this combination."
He said the combination would strengthen CoreStates' market leadership in
share of deposits in the five-county area, adding in particular to its lead
position in Montgomery county, where GSB has a 4% market share and CoreStates
will have 13% upon completing its pending acquisition of Independence Bancorp.
Martin I. Kleppe, chairman of GSB, said he was pleased that the savings
institution would combine with another old Philadelphia institution, and added
that "CoreStates' demonstrated commitment to both performance and people will
make this the best possible combination GSB could have made for its
shareholders, customers, employees and for the greater Philadelphia community."
CoreStates said the transaction will consist of 55% stock and 45% cash, and
that it intends for the stock portion to be tax-free. CoreStates plans to
purchase shares in the open market, before and after closing, equal to the
number of shares used for the acquisition.
GSB shareholders could elect to receive either stock or cash for their
shares. If either portion is oversubscribed, the excess would be allocated on a
pro rata basis to achieve the desired 55/45 stock/cash mix. The agreement
provides that CoreStates will issue no fewer shares than would be needed to meet
the $62.00 price at a CoreStates stock price of $27.50, and no more shares than
would be needed to meet the sale price at a CoreStates price of $22.50.
The bank would be merged into CoreStates Bank, N.A.
Larsen said that, as in any in-market merger, CoreStates would expect to be
able to reduce operating costs significantly, and also would expect to find
great interest among GSB's customers for new products and services that would
become available to them as a result of the combination.
Larsen said there are "closing costs and consolidation costs in the first
year, but that the combination would add to per share
earnings beginning in 1995."
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Larsen stressed that CoreStates would manage consolidation to insulate
customers of both banks from negative effects. "As in our other transactions,
we will bend over backward to maintain our people contacts and to make the
transitions in our back office operations smooth, if not invisible to customers.
We will show by our actions that customers are our priority."
To the extent the consolidation process might affect job levels in the
future, Larsen said all 599 GSB employees are considered part of the CoreStates
family immediately, and receive all the consideration implied in CoreStates'
strongly-held CoreValues.
"We aren't in a position to say how many positions might be affected by
changes over time, but as in the past we will be guided by a strong desire to
keep every affected employee that we possibly can within CoreStates," he said.
"This is not only required by our CoreValues, it is good business in the long
run."
Finally, he said, "We are gratified to be joining with an institution that
has not only shown its commitment to the community, but has worked side by side
with CoreStates in efforts to improve economic and social welfare in the
Philadelphia region."
Germantown Savings Bank was founded in 1854 as a savings fund society for
citizens of Philadelphia's Germantown section. It was converted to a stock
savings bank in 1987.
CoreStates, the nation's oldest banking company, traces its origins to the
1782 founding of the Bank of North America.
CoreStates has three other acquisitions pending. Its acquisition of the
49-branch, $2.3 billion-assets Constellation Bancorp of New Brunswick, NJ, has
received regulatory approval and assuming shareholder approval is expected to
close this month. Its acquisition of the 54-branch, $2.6 billion Independence
Bancorp of Perkasie, PA, assuming regulatory and shareholder approval, is
expected to close in the second quarter. And its acquisition of Rittenhouse
Financial Services, Inc., and Rittenhouse Trust Company also is expected to
close in the second quarter if it receives regulatory approval.
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